The economy isn’t going anywhere. Not anytime soon, according to the IMF. As Anna Yukhananov of Reuters reports:
The International Monetary Fund cut its growth forecast for the United States on Monday and said the economywould not reach full employment until the end of 2017, allowing the Federal Reserve to bide its time before raising interest rates.In its annual health ceck of the U.S. economy, the IMF also urged the United States to boost the minimum wage, which is below most international standards, to fight poverty, which lingers above 15 percent. The IMF forecast economic growth of 2 percent this year, below the 2.8 percent rate it predicted in April, due to a weak first quarter. It kept its 2015 forecast unchanged at 3 percent.
For people who believe the IMF knows what it is talking about and can see clearly into the future, this is obviously bad news. To others, it might look like an elegant alibi. If the IMF has said we will be stuck in a slow-growth rut, then there is no escape from it.
It is an appeal to an authority that might better be ignored. Reduce regulation. Lower taxes. Cease and desist with the crony capitalism schemes. Maybe even eliminate the minimum wage. Then see how the IMF’s expert prognostications hold up.
Those bankers probably liked the Heat in the playoffs, California Chrome in the Belmont, and Mickelson at the Open.
There is a reason it is called “the conventional wisdom.” That’s because it is so, ah, conventional.